- Further profit increase
- Dividend increase to EUR 3.60/share proposed
- High capacity utilization
- Significant growth in results in both divisions
- Good start into 2020 - challenges increase
The Mayr-Melnhof Group was able to conclude the year 2019 with a further profit increase in succession despite slower market dynamics. Both divisions made a significant contribution to this and reported overall good capacity utilization in a competitive environment.
While the cartonboard division benefited from largely stable average prices and cost reductions, the profit in the packaging division was significantly higher than in the previous year, mainly due to the initial inclusion of the Tann-Group, which met the expectations. At 10 %, the Group's operating margin again developed at a high level.
In line with the sound profit development, a recommendation will be made to the 26th Ordinary Shareholders' Meeting to increase the dividend for the financial year 2019 to EUR 3.60 per share (2018: EUR 3.20).
GROUP KEY INDICATORS - IFRS
in millions of EUR
2019 2018 +/-
Sales 2,544.4 2,337.7 + 8.8 %
EBITDA 389.6 324.4 + 20.1 %
Operating profit 255.3 217.1 + 17.6 %
Operating margin (in %) 10.0 % 9.3 %
Profit before tax 251.1 217.9 + 15.2 %
Income tax expense (60.9) (53.7)
Profit for the year 190.2 164.2 + 15.8 %
Earnings per share (in EUR) 9.49 8.18
The consolidated sales of the Group reached EUR 2,544.4 million and were thus 8.8 %, or EUR 206.7 million, above the previous year's value (2018: EUR 2,337.7 million). This increase was mainly acquisition-related from the packaging division and to a lesser extent from the cartonboard division.
EBITDA rose by 20.1 %, or EUR 65.2 million, to EUR 389.6 million (2018: EUR 324.4 million), the EBITDA margin to 15.3 % (2018: 13.9 %). At EUR 255.3 million, operating profit was 17.6 %, or EUR 38.2 million, above the previous year (2018: EUR 217.1 million), with MM Packaging accounting for around 60 % and MM Karton for around 40 % of this growth. In the course of the initial consolidation of the Tann-Group, one-off expenses from acquisition effects of EUR -4.8 million were reported due to the recognition of order backlog and inventory measurement. The Group's operating margin totaled 10.0 % (2018: 9.3 %), the return on capital employed amounted to 15.4 % (2018: 15.0 %).
Financial income totaling EUR 1.4 million (2018: EUR 1.3 million) was offset by financial expenses of EUR -8.4 million (2018: EUR -6.1 million). "Other financial result - net" changed to EUR 2.8 million (2018: EUR 5.6 million) in particular due to higher foreign currency gains in the previous year.
Profit before tax increased accordingly by 15.2 % to EUR 251.1 million (2018: EUR 217.9 million). Income tax expense amounted to EUR 60.9 million (2018: EUR 53.7 million), resulting in an effective Group tax rate of 24.3 % (2018: 24.7 %).
Profit for the year went up by 15.8 % to EUR 190.2 million (2018: EUR 164.2 million).
DEVELOPMENT IN THE 4TH QUARTER 2019
Market dynamics traditionally slowed towards the end of the year but remained overall more solid than in the previous year's quarter which had been characterized by a noticeable weakening due to a reduction in stocks along the supply chain.
MM Karton recorded a capacity utilization of 95 % after 90 % in the fourth quarter of the previous year. Operating profit of the division totaled EUR 23.1 million after EUR 16.5 million. The operating margin reached 8.7 % (4th quarter 2018: 6.3 %).
Operating profit of MM Packaging at EUR 36.6 million was mainly acquisition-related above the previous year's value (4th quarter 2018: EUR 28.3 million), resulting in an increase of the operating margin to 9.5 % (4th quarter 2018: 8.4 %).
Consolidated sales at EUR 620.1 million were around 7.9 % higher than in the previous year's period (4th quarter 2018: EUR 574.6 million). This growth is mainly due to the initial inclusion of the Tann-Group.
The Group's operating profit rose to EUR 59.7 million (4th quarter 2018: EUR 44.8 million), the operating margin to 9.6 % (4th quarter 2018: 7.8 %).
Profit before tax increased to EUR 56.9 million (4th quarter 2018: EUR 48.9 million), the profit for the period to EUR 43.9 million (4th quarter 2018: EUR 37.8 million).
OUTLOOK ON THE FINANCIAL YEAR 2020
European economies are showing low momentum. Nevertheless, private consumption continues to show a stable development and, thus, also the demand for cartonboard packaging. Against this background, the Group's cartonboard and packaging production facilities have overall again been highly utilized since the beginning of the year. Sales markets, however, remain characterized by intense competition due to sufficient capacities in the industry.
MM Karton continues to focus on maintaining price levels. The goal for both divisions is to continue to grow in 2020 and maintain profit quality at a high level.
Ongoing investment in state-of-the-art technological innovations and ongoing measures to improve cost efficiency and optimize the product and sales program are intended to make this possible also in the future.
The aim is to follow up the record year 2019 in the best possible way in 2020. After a good beginning of the year we consider the challenges in the course of the year increasing. As in the past, we will continue to pay high attention to the future-orientated development of our production facilities and products and the risk-conscious continuation of our global acquisition course.
The press release and a video presentation by the Management Board are available on the internet under: www.mayr-melnhof.com
The Annual Report 2019 will be available as of April 8, 2020.
May 14, 2020 Results for the first Quarter of 2020
For further information, please contact:
Mayr-Melnhof Karton AG
Tel.: +43 1 501 36-91180
Fax: +43 1 501 36-191195
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